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The Federal Energy Regulatory Commission has approved the wholesale rate treatment for a proposed $1.8 billion, 290-mile transmission line from American Electric Power's John Amos plant near St. Albans to a substation southeast of Frederick, Md.
The behemoth transmission line will likely go through Calhoun and other regional counties.
The Potomac-Appalachian Transmission Highline, known as PATH, is a joint venture of American Electric Power and Allegheny Energy, according to George Holhman, business editor of the Charleston Gazette.
American Electric Power's part of the project is approximately $600 million.
The Federal Energy Regulatory Commission is allowing the joint venture to charge rates that will earn a 14.3 percent return on equity, according to Holhman.
Dow Jones Newswires called the return "extremely high for a regulated utility project," and said, "the generous incentives provided reflect the government's desire to encourage new transmission lines to bring excess power from Appalachia and the Midwest to constrained areas in Maryland, Delaware and New Jersey."
"PATH addresses significant reliability concerns, including overloads that will occur on more than 13 existing transmission lines in Maryland, West Virginia, Virginia and Pennsylvania as soon as 2012 if the line is not built," said Michael Morris, AEP chairman.
Still, the nature of the project appears to to use a coal-fired power plant in West Virginia near the coal fields to generate electric for highly-populated urban areas in the northeast, as opposed to locating power plants near the areas of need.
PJM Interconnection, the regional transmission grid operator for a 13-state area that includes West Virginia, approved construction of the line last year.
Routing studies and environmental assessments have begun for the line.
"The companies anticipate seeking regulatory approvals for the project from the utility commissions in both West Virginia and Maryland in the fourth quarter of 2008, following the completion of the routing studies," AEP said.
Last October the Bush administration designated swaths of the eastern United States, including 41 of West Virginia's 55 counties, as critical to the nation's energy grid.
That designationallows new high-transmission lines to be built despite state or any local opposition - an right of imminent domain for a cause that excedes personal property rights.
American Electric Power said this week that it and Allegheny Energy are committed to working with landowners, neighboring residents, business owners, affected communities and regulators to minimie the impact of the PATH project.
AEP serves more than 5 million customers in 11 states.
The company's Appalachian Power subsidiary serves most of the southern half of West Virginia.
Allegheny Energy, which serves customers across the northern half of West Virginia, has also proposed construction of a transmission line that would extend from a point south of Pittsburgh to Middletown, Va. About 114 miles of that line would BE across West Virginia, passing to the west of Morgantown in Monongalia County and crossing Preston, Tucker, Grant, Hardy and Hampshire counties.
Allegheny has met stiff resistance from some landowners and community groups in Monongalia and Tucker counties.
Last October business, labor and lobbyiest representatives created "West Virginians for Reliable Power," a group organized to push for the giant transmission infrastructure.
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